By on February 3, 2009

Despite looking at a half-sized Q1 production plan, GM says it will bump truck production in the month of March. Production will be restored and escalated in March at GM’s Flint and Arlington truck plants, meaning there will be more Silverado, Sierra, Tahoe, Yukon and Escalade models. So, uh, why? “As far as our 2008 and 2009 mix goes, we’re significantly down on 2008 models, where most of our competitors have a lot of 2008 to get rid of. So anticipating a spring selling season, we’d like to increase our 2009 inventory,” GM’s Pete Ternes tells Automotive News [sub]. GM’s truck inventory has dropped noticeably, from a 122-day supply on December 1. But with 90 days of light truck supply, there’s still no real reason to increase production. Most industry-watchers consider a 60-day supply ideal. So what’s up?

Theory One: GM is making dealers take on more inventory in order to qualify for incentive cash. Having long ago become addicted to cash on the hood and seasonal blowout sales, The General’s binge-and-purge production model is just business as usual in Detroit.

Theory Two: This is production vaporware: a play at creating feel-good vibes for GM’s most important “customer” of all: the United States Congress.

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9 Comments on “GM Increases Truck Production. Or Not....”

  • avatar

    Looks like a win-win for GM. Book the sales now as they are crammed down dealer throats, then wait for the weak dealers to slip below the surface after choking on the outsized inventories, thereby thinning the dealer ranks at no cost to itself.

  • avatar

    #2 as all of GM hopes for an early Christmas.

    Give it 2-3 weeks and the release will say something about ‘continued deterioration in sales’ and the ramp will disappear.

  • avatar

    Are we sure this isn’t a union thing?

  • avatar

    Mix is the issue. If you do not have the high running models with the correct color/equipment you have problems. When you come down to the end of a model year you have the least desirable units remaining and that is what GM has on the ground at this time. So if you want to have a chance to sell some units you need to build the correct vehicles with the correct equipment othersize you sell nothing. That does not fix the on the ground issue but if enough of the new stuff gets sold you might have enough money to move the slow runners. Tricky

  • avatar

    roar –

    That’s interesting – What I think I hear you saying is that You have to have something that people want to get them in the door. Once they’re there, they may settle for something else but without the right stuff, you’ll never even get them in the door.

    Is that right? There’s a similar ‘in stock’rule in general retail… there’s a core group of products you can never be out of stock on, no matter how bad business gets, because without them people never shop at your store at all, and you go into a death spiral.

    If that’s the case, they have to build new stuff, even while the old stock sits there….

  • avatar

    Could it be that once GM shutters Oshawa Truck there will be a need to make up the volume shortfall south of the 49th? Just sayin’

  • avatar

    2008 to 2009 mix? That seems novel.

    I agree, sounds good to say that you will increase, but then not do it and blame it on something that was blatently obvious to 5% of the people (insiders) at the time intent was announced.

    If they do go thru with it, does this mean a Double Red-Tag Sale in April?? (let the deflationary economy begin!!)

  • avatar

    I did notice a huge Chevy dealer in the Boston area advertising 2009s only. No 2008 models left in Feb 2009? I guess that is a good thing these days.

  • avatar

    They also make the trucks at the Silao Mexico plant. That is where Oshawa’s production went. They also make pickups at Ft. Wayne, Indiana and I think the Pontiac plant is still open..

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